Ulgener

-Prof.Dr.M.Fehmi Ulgener

Demurrage is the payment of liquidated damages because of the breach of contract by the charterers by not completing the loading or discharging operations within the period called as laytime, which length is determined as per the individual charterparty. This is a well established rule in shipping law, but according English law that is.

in parallel of this principle, charterers are not able to benefit from the laytime exceptions, (since they are in breach of the contract) that is to say of the exceptions which are stopping the clock of laytime, i.e. Sundays and holidays will be counted as demurrage, even if there is a “shex” provision in the charterparty, or those times during which operations can not be made due to weather conditions will be counted also on demurrage. The principle of “once on demurrage always on demurrage” is the short description of this state of law as per English law. Therefore even this principle does not lay within the clauses of the charterparty, the result is as stated above, i.e. a clause in this regard is not changing the law, it is merely repeating the law.

This is different in some other laws; according German, Turkish and Scandinavian legal systems are heading in a different direction. As per these laws, charterers who could not complete the loading and discharging operations within the laytime are not in breach of the contract, on the contrary they have the right top keep the vessel at the berth to complete the operations even a further period (called demurrage), but they have to pay for it this time. In different words owners are obliged to make their vessel be used for loading and discharging during laytime without asking any return (since the owners have calculated and included the expenses etc of laytime into the freight) and also during the period of demurrage but this time in consideration of a payment. Therefore as per these laws use of demurrage is a right of the charterers given by law.

This difference is of course coming with a result; unless the charterparty contains “once on demurrage always on demurrage” clause, all the exceptions stopping the clock within the laytime can be also used for the period of demurrage, i.e. in order to make sure to reach the effect as per English law, this clause must be added to the charterparty. (There are contradictory articles within the new Turkish Commercial Code, therefore the effects are yet to be tested)